American Bankers Association Exam CRCM Topic 4 Question 83 Discussion

Actual exam question for American Bankers Association's CRCM exam

Question #: 83
Topic #: 4

[All CRCM Questions]

Which of the following are recommended practices In Avoiding Predatory and Abusive Lending Practices in Brokered and Purchased Loans---AL-2003-3?

AHave written agreements with third-party brokers that specifically and clearly address the rights and responsibilities of each party. Written agreements should
1. Ensure that no inappropriate compensation exists
2. Provide for indemnification to the bank
3. Enable banks to exit the arrangement through a termination procedure
4. Provide for the bank's and the OCC's ability to access all records of the third party and to audit the third party's operations

BVerify that brokers and originators have established policies to ensure that loans will comply with all applicable laws

CEstablish an effective management information system to monitor the performance of third-party brokers and originators

DAll of the above

Show Suggested Answer

Suggested Answer: A

by Helene at Mar 16, 2024, 11:19 PM

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Devora

1 months ago

I wonder if the OCC audits banks that don't follow these practices. Probably not a risk worth taking!

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Asuncion

5 days ago

D) All of the above

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Muriel

9 days ago

C) Establish an effective management information system to monitor the performance of third-party brokers and originators.

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Nakita

10 days ago

B) Verify that brokers and originators have established policies to ensure that loans will comply with all applicable laws.

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Marti

16 days ago

A) Have written agreements with third-party brokers that specifically and clearly address the rights and responsibilities of each party. Written agreements should ensure that no inappropriate compensation exists, provide for indemnification to the bank, enable banks to exit the arrangement through a termination procedure, and provide for the bank's and the OCC's ability to access all records of the third party and to audit the third party's operations.

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Yvette

1 months ago

Option B is a no-brainer. Verifying broker compliance is just common sense.

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Jaime

1 days ago

User 2: Agreed. It's crucial to verify compliance to avoid any issues down the line.

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Laurel

10 days ago

User 1: Option B is definitely important. We need to make sure the brokers are following the rules.

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Reed

1 months ago

Haha, I'm just hoping I don't end up like the sub-prime mortgage lenders. Gotta make sure we follow all the rules!

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Keena

2 months ago

I think option A is the most important. Having clear written agreements is crucial to protect the bank's interests.

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Hayley

6 days ago

User 3: Option A seems like the best choice to prevent any problems.

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Delpha

6 days ago

User 3: It also allows banks to exit the arrangement if needed and access all records for auditing purposes.

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Vallie

9 days ago

User 2: Definitely, it helps to ensure everyone knows their responsibilities.

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Maryln

14 days ago

User 2: Definitely, it helps ensure no inappropriate compensation and provides for indemnification.

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Merrilee

25 days ago

User 1: I agree, having clear written agreements is key to avoid issues.

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Marshall

1 months ago

User 1: I agree, having written agreements with third-party brokers is essential.

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Torie

2 months ago

Definitely option D. That covers all the key practices recommended in the guidance to avoid predatory lending.

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Minna

1 months ago

User 4: Establishing a management information system can help monitor and ensure the performance of third-party brokers.

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Aimee

1 months ago

User 3: Verifying that brokers comply with laws is also important to prevent predatory lending.

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Cathrine

1 months ago

User 2: Agreed, having written agreements with clear terms is crucial in avoiding abusive lending practices.

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Nydia

2 months ago

User 1: Definitely option D. That covers all the key practices recommended in the guidance to avoid predatory lending.

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Dominga

2 months ago

I'm not sure about D. I think B) Verify that brokers and originators have established policies is also important to ensure compliance.

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Becky

2 months ago

I agree with Sage. Having written agreements and monitoring performance are crucial in avoiding predatory lending practices.

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Sage

3 months ago

I think the answer is D) All of the above. It makes sense to have written agreements, verify compliance with laws, and monitor performance.

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